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Tony and Suzie see the need for a rugged all-terrain vehicle to transport participants and supplies. They decide to purchase a used Suburban on July 1, 2022, for $14,000. They expect to use the Suburban for five years and then sell the vehicle for $5,500. The following expenditures related to the vehicle were also made on July 1, 2022:

• The company pays $2,300 to GEICO for a one-year insurance policy.
• The company spends an extra $5,000 to repaint the vehicle, placing the Great Adventures logo on the front hood, back, and both sides.
• An additional $2,500 is spent on a deluxe roof rack and a trailer hitch.

The painting, roof rack, and hitch are all expected to increase the future benefits of the vehicle for Great Adventures. In addition, on October 22, 2022, the company pays $1,400 for basic vehicle maintenance related to changing the oil, replacing the windshield wipers, rotating the tires, and inserting a new air filter.

4. Record the depreciation expense and any other adjustments related to the vehicle on December 31, 2022. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Answer 1

4
Date	General Journal	Debit	Credit
Dec 31,2022	Depreciation expense	1600		=3200*6/12
	Accumulated Depreciation-Equipment		1600
Date	General Journal	Debit	Credit
Dec 31,2022	Insurance expense	1150		=2300*6/12
	Prepaid insurance		1150
	Workings:
	Cost of Equipment	21500		=14000+5000+2500
	Less: Salvage value	5500
	Depreciable cost	16000
	Divide by Useful life	5
	Annual Depreciation	3200